Efficiency versus democracy

Industrialist Ratan Tata has reportedly written to the prime minister cribbing about delays in implementing big buck projects. In his capacity as the chair of the government’s investment commission he says over us $50 billion is tied up because of delays in allocating land and resources. His list includes major steel, thermal power, mining and aluminium projects of powerful houses—South Korean corporate Posco, uk’s Lakshmi Mittal and India’s Essar, Reliance, Jindal and, of course, Tata itself.

The question is what more can the prime minister do? In the past few years, every government has gone out of its way to expedite the projects that Ratan Tata lists. They have ‘facilitated’ growth by changing laws for private investment, weakened laws (like those on environment) perceived to be barriers, provided tax breaks, granted rights to land and resources at throwaway prices. They have put their political and administrative weight behind what they believe is the growth enterprise.

For instance, the government has worked hard to ensure that the environmental impact assessment (eia) process becomes more ‘efficient’. In today’s jargon, this is synonymous with saying it has been weakened to industry’s advantage. A critical stage of eias was the public hearing—a meeting organised by the government to hear the views of affected communities and to find resolutions. This process was already weak because people were heard but not listened to. Therefore, what was needed was to strengthen this process so people would not just be consulted but also heeded.

But no. The Union ministry of environment and forests redrafted the rules to specify that only what it calls the legitimate public can participate in this meeting, meaning activists are debarred because they are seen as ‘trouble-makers’, inciting people to oppose projects.

Take the case of the Essar steel project in Ratan Tata’s list. This project is slated for the tribal districts of Chhattisgarh. Here poor people and forests block access to the rich minerals Essar wants. The public hearing, to which a Down To Earth (dte) correspondent went, was held amidst massive police presence. This, it was explained, was because the terrain was overrun by Naxalites. With this excuse, the state organised it so that village leaders were also put behind bars. Our colleague was denied entry to the public hearing because she was an “outsider”. Her camera captured H S Sethi, Essar’s Chhattisgarh director, at the meeting. As they came out of the so-called public hearing, tribals told her they were forced to sign papers agreeing to the project. They told her that this project would happen only over their dead bodies.

What more can the prime minister do? Will he ask how a company official was present at this meeting where “outsiders” were banned? Will he ask how a project is being discussed against the will of its people? Will he ask why the government is working against its own people? Or will he simply ask for more police to be sent so that ‘misguided’ and ‘orchestrated’ opposition is quelled?

Project after project, local people are not convinced of the benefits sold to them. In all mining projects—iron ore, bauxite and their related steel and aluminium projects—the government has expedited clearances, but people are not convinced. And why should they be? The poorest people of India live on these rich lands. They are concerned that resource extraction will leave them poorer—much poorer—as it will snatch their land, their water and degrade their environment, their survival base.

They don’t believe their concerns are accounted for when eias are done or projects cleared. Because they are not convinced, they hold up projects—take the matter to court or protest. This is why projects are cleared but delayed.

If there is a crisis of confidence what should the government do? It should strengthen regulation so that credibility is restored, you would say.

It has done the opposite. One of the most fatal flaws in the environmental clearance process—indeed its Achilles heel—is the fact that the consultant who prepares an eia is hired by the project proponent. Instead of changing this, the only step it has taken is to ask for consultants to be registered—voluntarily. Then it has passed on the job of this registration to an industry-based body. Talk about conflicts of interest.

Then were we surprised when dte ’s investigation into the deep-water port at Puducherry (‘Deep waters’, May 15, 2007) found discrepancies in the eia? The assessment, done by a global consultancy company glossed over, among other details, real threats to the town of Puducherry from increased erosion and pollution. When we contacted the consultant with our findings we were informed that the work had been done according to the terms of reference of the port’s promoter. When we contacted the company Subhash Projects and Marketing Limited we were told that the eia was actually a rapid assessment and that another review was being commissioned. It is another matter how this multi-crore project was sanctioned without a comprehensive assessment.

In this situation, what will the prime minister do to bail out the project? Ask for the entire eia process to be scrapped? Or ask why this project was cleared in disregard of procedures; then work to strengthen institutions for regulation and demand that assessments be paid for not by project proponents but by a statutory body. Industry will be charged a cess for each assessment, which will be credible and reliable. It is clear he will say that it is in the best interest of industry to improve this process.

Let us be clear that in this fight between democracy and efficiency, efficiency can win. Troops can be sent in; procedures can be dismissed. But then we will not have a country, only a corporation. Give democracy a chance.